There are serious consequences involved in a personal insolvency agreement (PIA). Make sure you understand these before making a proposal.
If you enter into a personal insolvency agreement:
- You are committing an act of bankruptcy - a creditor can apply to the court to make you bankrupt if the PIA fails.
- Your details will appear on the National Personal Insolvency Index (NPII) permanently.
- Your details will appear on your credit file for up to 5 years, or longer in some cases.
- You’re not able to deal with your property (e.g. house or car) without the consent of your controlling trustee.
- You may however be able to run your business if the terms of the agreement allow.
- You’re not able to manage a corporation until the terms of the agreement have been finalised.
- You are obligated to assist your trustee by providing information and documentation if requested.
For a comparison of the consequences of personal insolvency agreements, bankruptcy and debt agreements, see: Compare the formal options table.